Question

Which of the following is a consequence of a low minimum efficient scale?

A. It prevents a firm from utilizing capital equipment fully.

B. It enhances the need to centralize production in a single location or a limited number of locations.

C. It prevents a firm from accommodating demands for local responsiveness.

D. It increases the unit cost of products.

E. It allows a firm to hedge against currency risk by manufacturing the same product in several locations.

Answer

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